Israeli Foreign Policy:

Weapons Manufacturing Industry

excerpted from the book

Israeli Foreign Policy

by Jane Hunter

South End Press, 1987

... By the end of the 1970s, the Israeli
military industry was supplying 40 percent of Israel's military
needs. But production runs solely for the domestic market resulted
in high costs per item. The longer production runs necessary to
lower unit costs created an imperative to export.

The government began a concerted marketing
campaign, through diplomatic and military contacts, as well as
news releases and exhibits at fairs. In later years a sales force
of retired military officers eager for commissions fanned out
over the globe. While the secrecy of the Israeli government makes
it impossible to exactly calculate the volume of Israel's weapons
sales abroad, the general consensus of analysts of the international
arms trade indicates that between 1972 and 1980 Israel's arms
exports soared, particularly in the latter part of that span,
rising from $50 million to top $1 billion, and, with the possible
exception of 1983, have remained over $1 billion annually. A 1986
estimate puts annual sales at "more than $ 1.25 billion.
Since 1982 Israel has been ranked among the world's top ten arms
producers.

The importance to the overall economy
of the arms manufacturing sector also increased, with weapons
exports estimated to have comprised 31 percent of industrial exports
in 1975, up from 14 percent in 1967 and more recently 30 to 40
percent of Israel's industrial output. The arms industry employs
"anywhere from 58,000 to as many as 120,000 Israelis,"
or, taking the lower figure, percent of the industrial labor force,
with the biggest unit, Israel Aircraft Industries, the nation's
largest employer, carrying 20,000 on its payroll.

The export imperative, in turn, brought
its own set of problems, these centering on the overseas markets
available to Israel and on its choice of customers from that list.
For varying reasons, Israel was largely shut out of the Eastern
Bloc, the Arab world and NATO countries. That left its potential
clientele to be found on the peripheries: pariahs such as South
Africa and Guatemala, the strong-man regimes of Taiwan, Zaire,
and Chile, and the occasional government wary of strings-attached
arms purchases from the superpowers. Over the years Israel has
sold weapons-and often along with the weapons come Israeli advisers-to
Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti,
Honduras, Mexico, Nicaragua (under Somoza), Panama, Argentina,
Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Venezuela,
Cameroon, Ethiopia, Ghana, Kenya, Liberia, Morocco, Nigeria, Rhodesia,
South Africa, Swaziland, Tanzania, Uganda, Zaire, Australia, China,
Indonesia, Malaysia, New Zealand, Papua-New Guinea, Philippines,
Singapore, Sri Lanka, Taiwan, Thailand, Iran, and a number of
European countries and several non-governmental actions. Sometimes
even the least desirable customers have required some softening
up: "Greatly detailed stories abound of the huge bribes Israel
has used to suborn defense ministries, with the sole objective
of nailing down arms deals."

As time went on an additional problem
arose: arms sales became the motor driving Israel's foreign policy.
In times of economic crisis it became the supreme exigency. In
September 1986, the Israeli defense minister explained to a press
conference what was behind a raft of scandals involving Israeli
arms exports and technology thefts (these last, most frequently
from the U.S., have been an inevitable hallmark of a small country
attempting to sustain a full-scale armaments industry). "...We
cut our orders in our military industries..." he said, "and
I told them quite frankly: 'Either you'll fire people or find
export markets."

The export markets open to Israel are
frequently among the world's most unsavory; indeed, to be off
limits to the superpowers they often are located inside the very
gates of hell. Already under international censure for its oppression
of the Palestinians in the territories it occupies, Israel's dealings
with the scum of the world's tyrants-including the white clique
in South Africa, Somoza of Nicaragua, Gen. Pinochet of Chile,
Marcos of the Philippines, Duvalier of Haiti, Mobutu of Zaire,
the allegedly cannibalistic Bokassa of the Central African Republic-invariably
result in its further exclusion from more "respectable"
circles. "A person who sleeps with dogs shouldn't be surprised
to find himself covered with fleas," comments the military
correspondent for Israel's major daily newspaper.

Israeli critics, who term the phenomenon
"arms diplomacy," warn that the export imperative has
motivated a sequence of ad hoc, opportunistic decisions that have
precluded the development of a coherent foreign policy, which,
in turn, might over the long term mitigate Israel's isolated position
in the world. Yet these critics are far from sanguine about the
ability of Israel to set itself on a different course.

They point to the power of the "security
establishment lobby," comprised of the upper echelon of Israel's
political leadership (this has remained remarkably constant since
the founding of the state), the top levels of the military, and
the officials of the parastatal arms industries. As in the U.S.,
there is a "revolving door" in Israel, with many of
the top figures serving successively in two or all three of these
sectors. It is these men who find the clients and have insider
access to the Ministerial Committee on Weapons Transfers (MCD)-its
members are the prime minister and the ministers of defense, foreign
affairs, and trade and industry which will make the final decision
on every sale. Such decisions are made secretly- the Israeli parliament,
the Knesset, excluded. The cabinet, too, is often excluded. Critics
of the hegemony of the arms export business say it has relegated
the foreign ministry to a subordinate role in Israeli foreign
policy making, and they see in its wake grave social and political
consequences.

' A sector has evolved in Israel, headed
by an elite with identical social characteristics and marked by
a fairly high degree of cohesiveness, whose decisions and actions
have a significant effect not only on the country's economy and
its foreign and | defense policy but also on its social and value
systems. No less important, however, is the issue of whether a
closed system has been created whose activities and decisions
undergo less public supervision and scrutiny than any other area
of life in the country. '

A Co-equal Type of Proxy

Israeli analysts often argue that Israeli
arms sales are dependent on U.S. approval; in a limited sense
this is true. The U.S. has blocked-at the behest of Britain-the
delivery of A-4 Skyhawks to Argentina, and it has in the past
vetoed the export of the Kfir aircraft, leverage it is able to
exert because of the Kfir's U.S. engine. However, the Carter Administration
was unable to prevent Israeli nuclear cooperation with South Africa,
and the Reagan Administration was unsuccessful in persuading the
Israelis to halt their arms sales to Iran in the early 1980s (assuming
it wanted to). The Israeli success in persuading the Reagan Administration
to incorporate Israeli arms sales to the Islamic Republic into
a bizarre and controversial series of contacts with Iranian leaders
is probably more typical of the operative U.S.-lsraeli dynamic.

On the other hand, Israel has often obliged
this or that sector of the U.S. government, selling arms where
it would be embarrassing or illegal for the U.S. to do so: the
contras, the Peoples Republic of China in the early 1980s, and
the Derg government of Ethiopia are examples. In 1975, Israel
followed Secretary of State Henry Kissinger's advice and helped
South Africa with its invasion of Angola. Even after the passage
the following year of the Clark Amendment forbidding U.S. covert
involvement in Angola, Israel apparently considered Kissinger's
nod a continuing mandate.

Given the export imperative under which
the Israeli government operates, this 1981 proposal from the chief
economic coordinator in the Israeli cabinet, Yacov Meridor, should
be taken with great seriousness:

" We are going to say to the Americans,
'Don't compete with us in South Africa, don't compete with us
in the Caribbean or in any other country where you can't operate
in the open.' Let us do it. I even use the expression, ' You sell
the ammunition and equipment by proxy. Israel will be your proxy,'
and this would be worked out with a certain agreement with the
United States where we will have certain markets...which will
be left for us. "